Question

Evelyn is opening a savings account which earns 1.1% interest, compounded continuously. How much will she need to deposit in the account so that she has $9600 after 3 years?

Answer 1

Answer:

Step-by-step explanation:

The formula for compounding continuously is

$A(t)=Pe^{rt}$

We have that A(t) = 9600, r = .011, and t = 3

Filling in and solving for P:

$9600=Pe^{.011(3)}$  and

$9600=Pe^{.033}$  and

$9600=P(1.033550539)$  so

P = 9288.37

Answer 2

Answer: ≈$2,851.80

Use the formula for calculating compound interest

A(t)=P(1+rn)n⋅t,

We are given that P=$2,700, r=0.011, n=1, and t=5. Substituting the values into the formula and using a calculator to evaluate, we find

A(t)=P(1+rn)n⋅t=$2,700(1+0.0111)(5)(1)≈$2,851.80

So the final answer to the nearest dollar is $2,852.